Understanding Current and Non-Current Assets in Financial

School: University of New South Wales - Course: COMM 1140 - Subject: Accounting

Week 2 - Tutorial Questions DQ2.2) Current assets are short-term assets which will realise their benefit within 12 months, non-current assets are long-term assets which realise their benefit over a greater period than 12 months DQ2.5) an increase in dividends paid or a greater loss or smaller profit DQ2.9) Net profit refers to the sum of money after all operating/other expenses have been paid. Dividends are not referred to as an expense as they do not take away from net profit but rather another form of cash in retained profits. Both employee wages and the cost of products sold are referred to as operating expenses and therefore are counted when calculating net profit DQ2.10) both inventory and accounts receivable are most commonly sold and received within a 12 month period, making them current assets. P2.8) Revenue94,000 Less COGS10,500 Gross Profit83,500 Less Other Expenses Advertising Expense42,780 Rent Expense33,200 Electricity Expense5,090 (81,070) Net Profit2,430 2) Opening retained profits = 59,720 + Net Profit = 2,430 - Dividends = 0 Closing retained profits = 62,150 AssetsLiabilities & Shareholder's Equity Current AssetsCurrent Liabilities Cash4,610Accounts payable13,910 Accounts receivable13,450Loan payable35,000 Inventory18,000 36,060Total Liabilities Non-Current Assets

Furniture and Fittings34,000Shareholder's Equity Projection Equipment41,000Retained Profits62,150 Land and buildings60,000Share Capital60,000 135,000 Total Assets171,060Total Shareholder's Equity Total Liabilities & Shareholders' Equity P2.13) Revenue = 200,000 + 160,000 + 9000=369,000 P2.16 Expenses = 15,000 + 6,000 + 800 = 21,800